A private insurers 2018 premiums in Kansas ran too high at least compared to the medical bills it had to pay for customers that year.
That means thousands of Kansans get money back this fall because they got overcharged last year.
Sunflower, a subsidiary of Centene, ran afoul of rules in the Affordable Care Act, or Obamacare. That forced rebates of more than $25 million dollars to nearly 19,000 customers who bought Ambetter individual health plans.
Sunflower is looking to cut premiums for 2020 by more than 8%.
In past years, total Kansas rebates under the ACA never topped $5.5 million. But this year Kansas leads the nation. Sunflowers hefty refund puts the average rebate in the state at more than $1,000, or seven times the national average.
Sunflower and Centene didnt respond to requests for an interview this week.
Federal law requires insurers to spend a certain proportion of what they collect in premiums normally at least 80 percent on their customers health care. The rest can go toward the companys own costs and profits.
When companies miss the mark, they have to give money back, either as direct payments to their customers or reductions to their upcoming premiums. (In the case of employer plans, the rebates can go to the employer to be used in certain ways, such as discounting employee premiums.)
This fall saw massive rebates.
Companies across the country broke the ACA rule, triggering a national record of $1.37 billion in rebates.
In Kansas, they owed more than $27 million back to customers, almost all of which relates to Sunflowers individual plans. Smaller amounts involved insurers on the small- and large-employer markets.
What caused this years high premiums in Kansas and nationally?
Health care economist David Slusky said insurance companies have gradually adjusted to how the Affordable Care Act changed their markets since it became law in 2010. At the same time, corporate taxes are down and the for-profit world is thriving.
Profit has increased as the market has stabilized, the University of Kansas economics professor said. I think that increasing profit has resulted in more rebates. But I wouldnt read too much into an individual company, especially in an insurance market where theres so many things out of their control.
Youre watching to see what happens to your policyholders, Slusky said, but youre not the patient and youre not the (health care) provider.
